Finance Committee Agenda and Packet 2022 06 13

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LL City0r Louisville COLORADO • SINCE 1878 To: Finance Committee Memorandum I Department of Public Works From: Kurt Kowar, P.E., Director of Public Works and Utilities Cory Peterson, P.E., Deputy Director of Utilities Date: June 13, 2022 Re: Utility Financial Impacts — Marshall Fire The purpose of this memo is provide a preliminary summary of the financial impacts from the Marshall Fire to the Utility system. The vast majority of utility fire operating expenses have been accounted for in the water fund with current expenditures of approximately $700,000 with another $1.2 million encumbered for a total amount of $1.9 million. The table below provides a quick summary of impact. Items Expense ($) Items Expense ($) Replacement Meters/Parts $900,000 Ash/Smoke Mitigation $100,000 Water Quality Testing/Sampling $620,000 Stormwater Consulting $60,000 Repairs and Emergency Work $200,000 Water Modeling $20,000 All expenses are being documented and tracked. In addition, expenses have been or will be submitted for FEMA reimbursements pending eligibility. Assuming a FEMA reimbursement rate of 75% and 90%, an early projection range of $1.43 to $1.71 million can be calculated as returning to the Utility with $190,000 to $470,000 as an estimated final expense. The estimated impacts, as a percentage to the overall water operating 2022 budget, is also calculated at 5% to 12% respectively. While significant, the potential damage and the corresponding financial impacts could have been much greater, especially if the water main distribution system would have required replacement as seen in similar fires in urban areas. Three new CIPs (HBWTP Generator Replacement, Meter Enchantments and a Fire Vulnerability Assessment) have also been identified in direct response to the Marshall Fire with a current estimate of $12.7 million. These projects are discussed in more detail in the corresponding CIP memorandum. There are currently several unknown variables that have the potential of reducing or eliminating the financial impacts further and will require this preliminary estimate to be changed and updated. These variables including but are not limited to: insurance coverages, staff time reimbursement eligibility, grants and other funding opportunities. LL:1 0